Submission on the Victorian Department of Planning’s Building Electrification – Regulatory Impact Statement (RIS).

28 February 2025

To: Victorian Department of Planning
Re: Building Electrification – Regulatory Impact Statement

Thank you for the opportunity to provide feedback on the Victorian Department of Planning’s Building Electrification – Regulatory Impact Statement (RIS).

Victoria faces an energy security and cost dilemma, driven by high levels of fossil gas consumption and the depletion of low-sources of gas in Bass Strait. Meanwhile, the increased availability of highly efficient electric appliances has led to household electrification emerging as the least-cost way to meet the energy needs of the majority of Victorian homes.

Based on our prior independent analysis, IEEFA considers that the proposed electrification measures in this RIS are sensible and necessary to address Victoria’s energy challenges. They are also a minimum action that will be required to align residential greenhouse gas emissions to Victoria’s economy-wide emission reduction targets.

We support the Victorian government’s preferred Option 3, to electrify all new and existing residential buildings (excluding cooking), and all new commercial buildings.

Research by IEEFA and others has shown a risk of a ‘gas death spiral’ effect as gas distribution networks seek to recover their fixed costs while demand for their services drop. To avoid this leading to inequitable and cost-inefficient outcomes for Victorians, IEEFA also recommends:

• The Victorian government gives strong consideration to Option 4 of the RIS, which includes electrification of gas cooktops in existing buildings; and
• The Victorian government initiates a plan for how to efficiently and equitably decommission its gas distribution networks.

We also acknowledge that further work will be necessary to extend the benefits of electrification to commercial buildings.

Our full response is detailed in the following pages. Please do not hesitate to contact me to discuss any aspects of our submission further.

Kind regards,

Jay Gordon, Energy Finance Analyst, Australian Electricity, IEEFA